Modi’s US Visit: A Reality Check

Even before Prime Minister Narendra Modi reached the United States, officials in New Delhi and his fan club in the United States had lowered expectations for the outcome of the meeting with President Donald Trump. What Indian politicians, foreign policy officials, and academics need to realise is that the bloom is wearing off the romance that began with George Walker Bush towards India. Instead, in the world view of Donald Trump, India is a nice nation but a marginal one. Several reasons are there for this lowering of India’s status.

Constraints in the Relationship

The US-India relationship is constrained by five factors. First, the US has two enduring strategic partnerships—Britain and Israel—and with every other country the relationships are transactional. Thus, the United States never publicly discusses Israel’s nuclear weapons status and is careful to keep the military balance in the Middle East favorable to Jerusalem. With Britain, the special relationship has lasted over 150 years and in security matters London remains Washington’s closest partner. With other nations the US works on the principles that Trump has espoused more forcefully—you do something for me and I do something for you. And after that we negotiate again. Thus, the US may be committed to defending Europe but it ranks important nations like Germany and France below Britain in terms of strategic importance.

Second, India, despite all the reports by western financial firms about the growth of the Indian middle class and the country becoming a major destination for foreign investments, remains a lower tier player in the international economic system. In the last six months, the Saudis have inked a $ 110 billion arms deal with Washington and Qatar agreed to a $ 12 billion deal to buy F-15 fighters. Xi Jinping came to Florida and gave Trump 38 patents for his products to be manufactured in China while Trump’s daughter Ivanka got three patents.

To be taken seriously in a transactional relationship, you have to engage in transactions. India takes forever to negotiate trade deals and the amounts it offers are too small for the ambitious plans of President Trump. So while the Saudis buy $110 billion worth of arms with minimal negotiations, India takes over 10 years to negotiate the $ 10 billion purchase of 36 Rafale fighters. As a Gujarati, Prime Minister Modi will recognise the expression Gujarati traders use to express contempt for an over demanding businessman. They say he wants the items songu (of good quality), sastu (cheap), udhar (on credit) and namtu (I sell it to him with due humility). India has to move beyond such bargaining practices to be taken seriously.

Additionally, it’s all very good to expedite the visa processes for businessmen but, until New Delhi makes it easy to do business in India, this is an incremental step that does little to jump start Narendra Modi’s Make-in-India projects. As long as India remains one of the more difficult nations to do business in, cosmetic changes like visa procedures do little to change India’s international reputation or make it a lucrative place to invest.

Third, unlike the cultural links between Europe and the United States, there are no emotional-cultural links between the US and India. There are no religious ties or ethno-cultural linkages that make India appealing to the United States and this is best exemplified by the response to terrorist actions in Europe and India. When a terrorist act is perpetrated in Europe, the American media goes into full operational mode and there is exhaustive coverage of the event. Moreover, it makes Americans feel insecure and unsafe when white western nations are attacked. In contrast, when nonwestern nations are attacked the coverage is lower and the sense of outrage is far less. This lack of emotional and cultural ties makes it difficult for Indian politicians to go beyond a certain point in building strong relationships with the incumbent in the White House.

Fourth, India’s strategic interests and objectives only partially coincide with traditional American ones. India is not interested in entering into expeditionary operations in the Middle East or Afghanistan even though there has been some talk of sending an Indian division to Afghanistan to help with the US war effort there. Indian politicians, Modi included, are loath to use force outside India’s immediate neighborhood and that makes any talk of a true strategic partnership meaningless.

Further, while Indian officials are crowing about the fact that the Modi-Trump joint statement mentioned Pakistan allowing its territory to be used as a staging ground for terrorist operations, the actual fact is that it would take another 9/11 like mega terrorism event to get Washington to declare that Islamabad is a state sponsor of terrorism—which is what India would really like to happen. The US military needs the supply route from Pakistani ports into Afghanistan and, more importantly, there is a recognition in Washington that the road to a final peace settlement in Kabul is through Islamabad.

Also, given that several nations in the world are negatively impacted by terrorism, it is hard for India to make a case that it suffers the most from such actions and, while there may be some sympathy in Washington on this issue, it will not lead to any serious action against Islamabad.

Finally, the United States has three major strategic challenges—the Middle East, Russia, and China—and every president since George W. Bush has sought to make China the long- term strategic challenge but, instead, has been forced to refocus on the Middle East. Trump has made this shift early both through economic and military actions. The US has lessened its rhetoric on the South China Sea, which was so upsetting to Beijing, and Trump has shown the pragmatism of a leader who understands the high level of economic interdependency between China and the United States.

At the same time, the Trump Administration recognises that of the three strategic challenges it can only do one at a time and is focusing on the Middle East since that is where a likely terror attack on the American homeland will originate. Long story short, India needs to reconsider all the talk from the Obama Administration about a strategic partnership to contain China. Instead, it needs to recalibrate the China policy so that it does not depend on US support on key issues.

Future Prospects

So, what can be done in the Trump era to strengthen ties between the two countries? There are several easy and tough measures that can be taken to show that India is a good friend and one that should not be ignored in the international system. As I have written elsewhere, there are six India-US relationships: the political relationship; the military-to-military relationship; the relationship between US universities and Indian students; the link between Silicon Valley and Bengaluru the ties of the Indian diaspora to India; and finally the emerging link between Hollywood and Bollywood. Indian politicians, bureaucrats, and foreign policy analysts are obsessed over the first two relationships even though these are the most complicated and give few rewards in the short to medium term.

The Silicon Valley-Bengaluru link, however, is unlikely to diminish since the amount of off-shoring that has been done by the California firms is difficult to reverse. Further, companies like Google, Microsoft, and Facebook will only grow their presence in India since they see the future importance of the Indian market to their fortunes.

The Indian diaspora has been poorly used by the Indian government although one must add that Desis are also to blame in this process. The first generation of Indians who came to America in the 1960s and 1970s have retired but they could have worked at various Indian universities, corporations, and think tanks to build up the capabilities of these organizations—particularly in the sciences. Yet little has been done to bring such people back to India to help. The notable exception has been the IITs since they now offer short modular courses that adjunct faculty can come and teach for a few weeks.

Having said that, one should also note that the largest chunk of remittances to India do not come from NRIs in the United States but, instead, from Indians in the Gulf. So, expecting this community to actually invest in India is a wishful thinking. Parts of the Indian diaspora are, however, willing to come and contribute to the development of the knowledge economy in India and that should be encouraged by the Ministry of External Affairs rather than focusing on the largely symbolic Bharatiya Pravasi Divas where NRIs get to take photos with the PM Additionally, I would add to these linkages the importance of using American help to modernise Indian agriculture and to improve Indian education. Also, economic and market reforms have to gather momentum.

First and foremost, Prime Minister Modi needs to start pushing through the economic reforms that make India attractive to foreign investors and if one looks at the different sectors where he would like foreign companies to invest there are some where this could be done with lesser bureaucratic and political interference. The focus is on defensce manufacturing but there are far more fruitful sectors where American investment could come in easily and would have a significant impact on the Indian economy.

Biotechnology, for example, is not an area where foreign investment would trod on the toes of vested economic and political interests in India. A similar case could be made for leather, renewable energy, tourism, or wellness all of which are on the Prime Minister’s Make-in-India list. Renewable energy would be a crucial sector to set up joint ventures in since renewables are probably going to be the primary source of Indian energy in the coming decades.

An equally compelling case could be made for agriculture where it makes sense to bring in American companies who understand refrigeration and storage thus removing the almost 33 per cent annual wastage and rotting of Indian crops. And then there is education.

Indian universities have resisted allowing American universities to set up branch campuses in India where the charges have ranged from educational imperialism to the fear that this would see a flight of students from India’s underperforming universities. It is important to remember that Shanghai Jiao Tang University does an annual ranking of the top 500 universities in the world and only one Indian university makes the top 500 (but not the top 100). Even Singapore has two on the list.

But India does not need more liberal arts universities. What it needs to do is to operationalise the agreement signed during the Obama Administration to build 200 community colleges (vocational schools) in India. What India needs are trained electricians, plumbers, and materials workers who can engage in twenty-first century construction and can set up their own small businesses in the country.

In conclusion, India needs to recognise that it is neither a major economic or political player in the eyes of the United States but it is seen as a friendly nation and it should build on that friendship to develop the Indian economy. Further, India has shown in the past that its officials and its people can show hospitality like few other countries to visiting American dignitaries and their families. India treated Hillary and Chelsea Clinton like royalty when they visited India in the 1990s and that helped set the stage for turning around the moribund relationship between the two countries. Prime Minister Modi’s invitation to Ivanka Trump presents another such opportunity.